Diamond top formation

A diamond top formation is a bearish reversal pattern which occurs at the end of an uptrend. It is made up of a broad range of two conflicting price patterns. First there is a region where candlesticks make higher highs and lower lows, followed by a region of lower highs and higher lows to complete what looks like a diamond.

Diamond Top Formation Pattern

The diamond top formation takes weeks or even months to form and during the period of formation of this pattern, volume of trade remains high. The trader only sells the asset when the break of the diamond top to the downside has occurred.